The government’s quest to return to the international capital market has been sharply criticised, as an economist warns that the renewed appetite to borrow is premature and misguided.
Economist at the University of Ghana Business School, Prof. Patrick Asuming, says the timing to return to the capital market is wrong and the move could derail the gains made so far and land the economy in trouble.
President John Mahama, at the just-ended 9th CEO Summit, announced the intention of the government to re-engage the Eurobond market. This, he mentioned as part of the government’s strategies to drive the economy to the next level.
But Prof. Asuming, in his reaction, indicated that the hurried move reflects a government “dazed” by the cedi’s recent strong performance.
This move, he says, suggests that the government believes all is well with the economy, losing sight of deeper structural weaknesses in the economy.
In the eyes of the economist, returning to the international capital market should be the last item on the government’s agenda.
Priority, he says, should rather be given to fixing the structural deficiencies of the economy before any attempt to borrow from the international capital market.
“Going back to the inter-capital market, I think it shouldn’t be part of our thinking at the moment. We still have fundamental challenges in the economy that have to be addressed,” the economist insisted.
He added that, “The President should focus on fixing the real sector issues. It appears that the recent strong performance of the cedi seems to have taken too much attention, and we seem to forget that the economy still has real problems. So, I think when we have the kind of challenges we have, our focus should be on fixing the challenges and not trying to get access to the international capital market.”
The Ghana cedi has appreciated significantly in recent months, buoyed by improved reserves, tighter monetary policy, and cocoa syndication inflows. But Prof. Asuming believes this performance is not a sufficient basis for returning to external borrowing, especially given the fragility of Ghana’s economic recovery.
In his view, the government appears to think that stronger reserves and a firmer cedi make us ripe for borrowing again, an assertion he strongly opposes.
Ghana has been shut out of international capital markets since 2022 after its debt levels became unsustainable, leading to a default and a subsequent IMF bailout. The country is currently in the midst of a complex debt restructuring program with both bilateral and private creditors.
Prof. Asuming warned that returning to the markets without first building a solid economic foundation could lead Ghana down a path of renewed fiscal stress and external vulnerability.
He urged the Mahama administration to remain focused on restoring confidence in the real economy, strengthening local industries, and building lasting resilience instead of relying on debt-driven growth strategies.
